A smart businessman looks through the relationship he has with his suppliers and vendors. It defines the workflow success and reflects your ability to nurture them in the best manner possible. A streamlined workflow is possible when there is a smooth supply chain with fewer delays and gaps.
Sometimes, you may go through a phase of miscommunication with your vendor. The other times, your supplier has insufficient knowledge about your products and services. All this could impact your business operations. That’s why it’s important to maintain a cordial relationship with your vendors and suppliers.
In this blog, we’ll discuss the challenges faced by buyers and suppliers and how to reduce the risks attached. Let’s begin.
Lack of Communication
To achieve business goals, you’re expected to communicate your vision and what you expect from each other. In case there is a misunderstanding and no proper channel of communication, your business is likely to suffer. In a buyer-supplier relationship, it can happen that your supplier may not understand the severity of the process or why it is urgent to deliver material to your loyal clients. In turn, it could ruin your rapport with your supplier. Therefore, you should clearly communicate with your vendors and suppliers when forming a partnership. It can help you resolve major issues in no time.
Lack of Transparency
If you neither communicate your needs to the suppliers nor maintain transparency, your supply chain will be impacted. For example, when a supplier has delivered material but has not acknowledged payments, or you’ve not given material acknowledgment, there could be disputes related to prices. It could lead you to list your vendor as business credit defaulters.
Another example is when your shipment/consignment is delayed. There is no acknowledgment of time, place, material received; it could turn into a tricky situation, as you may find it difficult to track it and may get into a conflicting situation with your vendor. That’s why you need to be clear about the process and define terms right from the beginning itself. When there is transparency in the system, there are fewer chances of fraud.
Poor Business Credit Management
Adding more from the previous point, if your vendor delays payment, you’re liable to inform credit reporting bureaus like CreditQ that helps businesses with the payment settlement process. It’s good to have solid credit management for business. In a B2B environment or MSMEs who depend on vendors and suppliers for materials, they often allow suppliers to work on a credit system. You, as a creditor, will have to take stern measures in defining credit terms and policies right from the beginning. Your business credit management report should be impressive as it can open a lot more business opportunities.
Burdening the Suppliers
A supplier works with several organizations at once. He or she is accountable for order delivery as much as you are to make timely deals. Sometimes, an order is delayed due to the unavailability of the product. It creates pressure on the suppliers, and buyers are unable to understand the reasons for the delay. Even if they understand, they tend to ignore the concerns, which could weaken the relationship. As a buyer, you need to empathize with the supplier as well. It helps both parties to fulfill their commitments on time.
No Proper Training Imparted to Suppliers
When you shake hands with new suppliers, it’s your job to train and nurture them. In case you don’t train your suppliers on your company’s products, processes, deliverables, you could run into a loss. The reason being, the supplier will carry out the work having half-knowledge of the products and processes. It may lead to delayed deliveries, confusion on the product batches, etc.
If you have got new suppliers, make efforts to train them properly. This way, they can add value to your business in their capacity.